CS/CS/HB 907

1	A bill to be entitled
2	An act relating to the transfer of tax liability; amending
3	s. 213.758, F.S.; providing definitions; revising
4	provisions relating to tax liability when a person
5	transfers or quits a business; providing that the transfer
6	of the assets of a business or stock of goods of a
7	business under certain circumstances is considered a
8	transfer of the business; requiring the Department of
9	Revenue to provide certain notification to a business
10	before a circuit court shall temporarily enjoin business
11	activity by that business; providing that transferees of
12	the business are liable for certain taxes unless specified
13	conditions are met; requiring the department to conduct
14	certain audits relating to the tax liability of
15	transferors and transferees of a business within a
16	specified time period; requiring certain notification by
17	the Department of Revenue to a transferee before a circuit
18	court shall enjoin business activity in an action brought
19	by the Department of Legal Affairs seeking an injunction;
20	specifying a transferor and transferee of the assets of a
21	business are jointly and severally liable for certain tax
22	payments up to a specified maximum amount; specifying the
23	maximum liability of a transferee; providing methods for
24	calculating the fair market value or total purchase price
25	of specified business transfers to determine maximum tax
26	liability of transferees; amending s. 213.053, F.S.;
27	authorizing the Department of Revenue to provide certain
28	tax information to a transferee against whom tax liability
29	is being asserted pursuant to s. 213.758, F.S.; repealing
30	s. 202.31, F.S., relating to the tax liability and
31	criminal liability of dealers of communications services
32	who make certain transfers related to a communications
33	services business; repealing s. 212.10, F.S., relating to
34	a dealer's tax liability and criminal liability for sales
35	tax when certain transfers of a business occur; providing
36	an effective date.
37
38	Be It Enacted by the Legislature of the State of Florida:
39
40	Section 1.  Section 213.758, Florida Statutes, is amended
41	to read:
42	213.758  Transfer of tax liabilities.-
43	(1)  As used in this section, the term:
44	(a)  "Business" means any activity regularly engaged in by
45	any person, or caused to be engaged in by any person, for the
46	purpose of private or public gain, benefit, or advantage. The
47	term does not include occasional or isolated sales or
48	transactions involving property or services by a person who does
49	not hold himself or herself out as engaged in business. A
50	discrete division or portion of a business is not a separate
51	business and must be aggregated with all other divisions or
52	portions that constitute a business if the division or portion
53	is not a separate legal entity.
54	(b)  "Financial institution" means a financial institution
55	as defined in s. 655.005 and any person who controls, is
56	controlled by, or is under common control with a financial
57	institution as defined in s. 655.005.
58	(c)  "Insider" means a person as defined in s. 726.102(7),
59	and a manager of, or a managing member of, a person who controls
60	a limited liability company or a relative thereof as defined in
61	s. 726.102(11).
62	(d)(a)  "Involuntary transfer" means a transfer of a
63	business, assets of a business, or stock of goods of a business
64	made without the consent of the transferor, including, but not
65	limited to, a transfer:
66	1.  That occurs due to the foreclosure of a security
67	interest issued to a person who is not an insider as defined in
68	s. 726.102;
69	2.  That results from an eminent domain or condemnation
70	action;
71	3.  Pursuant to chapter 61, chapter 702, or the United
72	States Bankruptcy Code;
73	4.  To a financial institution, as defined in s. 655.005,
74	if the transfer is made to satisfy the transferor's debt to the
75	financial institution; or
76	5.  To a third party to the extent that the proceeds are
77	used to satisfy the transferor's indebtedness to a financial
78	institution as defined in s. 655.005. If the third party
79	receives assets worth more than the indebtedness, the transfer
80	of the excess may not be deemed an involuntary transfer.
81	(e)  "Stock of goods" means the inventory of a business
82	held for sale to customers in the ordinary course of business.
83	(f)  "Tax" means any tax, interest, penalty, surcharge, or
84	fee administered by the department pursuant to chapter 443 or
85	any of the chapters specified in s. 213.05, excluding chapter
86	220, the corporate income tax code.
87	(g)(b)  "Transfer" means every mode, direct or indirect,
88	with or without consideration, of disposing of or parting with a
89	business, assets of the business, or stock of goods of the
90	business, and includes, but is not limited to, assigning,
91	conveying, demising, gifting, granting, or selling, other than
92	to customers in the ordinary course of business, to a transferee
93	or to a group of transferees who are acting in concert. A
94	business is considered transferred when there is a transfer of
95	more than 50 percent of:
96	1.  The business;
97	2.  The assets of the business; or
98	3.  The stock of goods of the business.
99	(2)  A taxpayer engaged in a business who is liable for any
100	tax arising from the operation of that business, interest,
101	penalty, surcharge, or fee administered by the department
102	pursuant to chapter 443 or described in s. 72.011(1), excluding
103	corporate income tax, and who quits the a business without the
104	benefit of a purchaser, successor, or assignee, or without
105	transferring the business, assets of the business, or stock of
106	goods of a business to a transferee, must file a final return
107	for the business and make full payment of all taxes arising from
108	the operation of that business within 15 days after quitting the
109	business. A taxpayer who fails to file a final return and make
110	payment may not engage in any business in this state until the
111	final return has been filed and all taxes, interest, or
112	penalties due have been paid. The Department of Legal Affairs
113	may seek an injunction at the request of the department to
114	prevent further business activity of a taxpayer who fails to
115	file a final return and make payment of the taxes associated
116	with the operation of the business until such taxes tax,
117	interest, or penalties are paid. A temporary injunction
118	enjoining further business activity shall may be granted by a
119	circuit court with jurisdiction over the taxpayer if the
120	department has provided at least 20 days' prior written notice
121	to the taxpayer without notice.
122	(3)  A taxpayer who is liable for taxes with respect to a
123	business, interest, or penalties levied under chapter 443 or any
124	of the chapters specified in s. 213.05, excluding corporate
125	income tax, who transfers the taxpayer's business, assets of the
126	business, or stock of goods of the business, must file a final
127	return and make full payment within 15 days after the date of
128	transfer.
129	(4)(a)  A transferee, or a group of transferees acting in
130	concert, of more than 50 percent of a business, assets of a
131	business, or stock of goods of a business is liable for any
132	unpaid tax, interest, or penalties owed by the transferor
133	arising from the operation of that business unless:
134	1.a.  The transferor provides a receipt or certificate of
135	compliance from the department to the transferee showing that
136	the transferor has not received a notice of audit and the
137	transferor has filed all required tax returns and has paid all
138	tax arising is not liable for taxes, interest, or penalties from
139	the operation of the business identified on the returns filed;
140	and
141	b.  There were no insiders in common between the transferor
142	and the transferee at the time of the transfer; or
143	2.  The department finds that the transferor is not liable
144	for taxes, interest, or penalties after an audit of the
145	transferor's books and records. The audit may be requested by
146	the transferee or the transferor and, if not done pursuant to
147	the certified audit program under s. 213.285, must be completed
148	by the department within 90 days after the records are made
149	available to the department. The department may charge a fee for
150	the cost of the audit if it has not issued a notice of intent to
151	audit by the time the request for the audit is received.
152	(b)  A transferee may withhold a portion of the
153	consideration for a business, assets of the business, or stock
154	of goods of the business to pay the tax taxes, interest, or
155	penalties owed to the state by the transferor taxpayer arising
156	from the operation of the business. The transferee shall pay the
157	withheld consideration to the state within 30 days after the
158	date of the transfer. If the consideration withheld is less than
159	the transferor's liability, the transferor remains liable for
160	the deficiency.
161	(c)  A transferee who acquires the business or stock of
162	goods and fails to pay the taxes, interest, or penalties due may
163	not engage in any business in the state until the taxes,
164	interest, or penalties are paid. The Department of Legal Affairs
165	may seek an injunction at the request of the department to
166	prevent further business activity of a transferee who is liable
167	for unpaid tax of a transferor and who fails to pay or cause to
168	be paid the transferee's maximum liability for such tax due
169	until such maximum liability for the tax is, interest, or
170	penalties are paid. A temporary injunction enjoining further
171	business activity shall may be granted by a circuit court with
172	jurisdiction over the transferee if: without notice.
173	1.  The assessment against the transferee is final and
174	either:
175	a.  The time for filing a contest under s. 72.011 has
176	expired; or
177	b.  Any contest filed pursuant to s. 72.011 resulted in a
178	final and nonappealable judgment sustaining any part of the
179	assessment; and
180	2.  The department has provided at least 20 days' prior
181	written notice to the transferee of its intention to seek an
182	injunction.
183	(5)  The transferee, or transferees acting in concert, of
184	more than 50 percent of a business, assets of the business, or
185	stock of goods of a business who are liable for any tax pursuant
186	to this section shall be are jointly and severally liable with
187	the transferor for the payment of the tax taxes, interest, or
188	penalties owed to the state from the operation of the business
189	by the transferor up to the transferee's or transferees' maximum
190	liability for such tax due.
191	(6)  The maximum liability of a transferee pursuant to this
192	section is equal to the fair market value of the business,
193	assets of the business, or stock of goods of the business
194	property transferred to the transferee or the total purchase
195	price paid by the transferee for the business, assets of the
196	business, or stock of goods of the business, whichever is
197	greater.
198	(a)  The fair market value must be determined net of any
199	liens or liabilities, with the exception of liens or liabilities
200	owed to insiders.
201	(b)  The total purchase price must be determined net of
202	liens and liabilities against the assets, with the exception of:
203	1.  Liens or liabilities owed to insiders.
204	2.  Liens or liabilities assumed by the transferee that are
205	not liens or liabilities owed to insiders.
206	(7)  After notice by the department of transferee liability
207	under this section, the transferee has 60 days within which to
208	file an action as provided in chapter 72.
209	(8)  This section does not impose liability on a transferee
210	of a business, assets of a business, or stock of goods of a
211	business pursuant to an involuntary transfer.
212	(9)  The department may adopt rules necessary to administer
213	and enforce this section.
214	Section 2.  Subsection (17) of section 213.053, Florida
215	Statutes, as amended by chapter 2010-280, Laws of Florida, is
216	amended to read:
217	213.053  Confidentiality and information sharing.-
218	(17)  The department may provide to the person against whom
219	transferee liability is being asserted pursuant to s. 213.758 s.
220	212.10(1) information relating to the basis of the claim.
221	Section 3.  Section 202.31, Florida Statutes, is repealed.
222	Section 4.  Section 212.10, Florida Statutes, is repealed.
223	Section 5.  This act shall take effect July 1, 2011.

CODING: Words stricken are deletions; words underlined are additions.